I was wondering, is there a facility to change HTML tags only to lower case ? IE <P> to <p> but leave non-HTML tags alone ?

HippoEDIT supports case correction for keywords. For example, if you would type P inside a tag it should be corrected to p i you have selected such preference in Options->Formattin->Smart Helpers->Case Correction.In addtition to this, same rules are used, if you apply formatting functions (Format Slection, or Format All), from main menu Formatting. So set Case Correction to lower case, select text and call Format Selection.

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ALSO - what about XHTMl compliant ?

HippoEDIT is not a specialized HTML editor, it knowledge about HTML is limited to rules defined in syntax file (html_spec.xml). So for such functionality should be used or external tools or scripting support, that would be introduced next version. You can achive something by using code templates for such constructions, then you would not need to type close tags